Grains and Oilseeds: July corn closed at $6.36 ½ per bushel, down 12 1/4c after trading as low as $6.25 during the session. Weather conditions improved allowing farmers to start aggressive plantings leading to expectation of a record corn crop. The USDA monthly crop report forecast a greater than expected domestic supply for the next year prompting long liquidation. We prefer the sidelines in corn. July wheat closed at $7.03 ½ per bushel, down 20c with the low of $7.02 posted during the session. The USDA crop report also impacted wheat prices. We prefer the sidelines here as well. July soybeans closed at $13.98 ½ per bushel, down 10 1/4c also tied to the USDA forecast for an increase of domestic stocks. We had been bullish for soybeans and are now on the sidelines as well.
Meats: June cattle closed at $1.2040 per pound, down 15 ticks. We have no comment this week. June hogs closed at 90.75c per pound, up 175 points and we also have no comment here as well. Even with the onset of summer barbecue season, the mixed fundamentals do not provide us with any directional suggestions.
Coffee, Cocoa and Sugar: July coffee closed at $1.4420 per pound, down 3.7c on profittaking after having gained over 3% to its two month high on Thursday. We liked the long side of coffee even against expectations of better than expected off year Brazilian crop estimate. Cold weather for Brazil is forecast and short covering was the main feature of late. Technically motivated fund buying also a factor in the recent strength. We would hold off any new purchases pending further information from Brazil. July cocoa closed at $2,305 per tonne, down $44 on speculation that the buying of late was overdone against expected adequate supplies to meet demand. We like the sidelines from here. July sugar closed at 17.39c per pound, down 8 ticks closing in a 2 ½ year low. Expectation for a record cane crop from Brazil and larger than expected output from both Thailand and India remains a factor in the selling pressure. We continue to prefer the sidelines in sugar.
Cotton: July cotton closed at .8669c per pound, down 1.23c on mixed trading midway between the late February low of .8270c and mid-march high of .9420c. The International Cotton Advisory Committee early in the month had raised price expectations even against their estimate for greater world inventories. We prefer the sidelines until further fundamentals emerge.